BUS137 - Economics for Business Management - 2023/24

In a market-based economy, households and firms make decisions. The government is mostly entrusted with regulations to allow the smooth functioning of the market.  Households decide about work and leisure and consumption of different goods to maximise their utility. Firms make decisions related to labour hiring and investments to maximise their profit.  This decision would be also dependent on the type of market. Markets could be competitive where firms and households act as price takers or it could be imperfectly competitive if these economic agents can influence prices. We will start with a perfectly competitive market that will act as a benchmark to compare the decisions of households and firms in imperfectly competitive markets.